What is a No Fault Auto Insurance Law?

It is happening right now somewhere in the world. Despite the best of intentions and skills of two drivers, their cars are colliding and an accident has just occurred. In a fantasy world, both drivers would be able to file claims with their insurance companies and get the settlement money needed to make both them and their cars whole again. In reality, that is the concept before no-fault auto insurance.

No Fault Auto Insurance Law Basics

The no-fault insurance law is a type of auto insurance law that allows those involved in a collision to avoid being declared at fault – it makes both parties equally liable for the accident. The first no fault auto insurance laws were passed in 1970, and at that time 24 states opted to enact no-fault auto insurance laws.

States with Active No Fault Auto Insurance Laws

Currently only twelve states still have that rule on the books. Here are a list of states with active no-fault auto insurance laws:

  • Florida
  • Hawaii
  • Kansas
  • Kentucky
  • Massachusetts
  • Michigan
  • Minnesota
  • New Jersey
  • New York
  • North Dakota
  • Pennsylvania
  • Utah

Because the laws for no-fault auto insurance are constantly under review, it is important to contact your insurance provider to see how you are covered.

No-fault insurance eliminates having to find one party at fault for the cause of fender benders. The original purpose of no-fault auto insurance laws was to minimize the need of government intervention in the form of court proceedings. Additionally motorists could get back to driving more quickly than the traditionally methods of insurance claims.

Disadvantages of No Fault

Not all is positive when it comes to the no-fault auto insurance law. Many critics of the policy think that the lack of accountability the law creates contributes to the bad driving habits of the already reckless and careless. Another criticism of no-fault auto insurance laws is that for those twelve states that have them, the cost of their insurance is higher than the states that do not have the no-fault auto insurance law on the books.